They're trying to do it more like a cartel where all major providers raise prices in unison. The intention is (probably) less specific entrapment and more getting people addicted to a fast LLM. From there, they all play with pricing to give a semblance of choice, without actually overly undercutting each other. At least, in the west.

This is all done to help valuations. The main revenue source are the investor dollars at the prospect that this industry will very soon actually be sustainable and highly profitable. It won't be, but if very soon stays around the corner consistently, the investor dollars keep coming.

Do I need the most intelligent model to generate boilerplate code, which is my main usage for AI? Resounding No.

For my use case a model from a year ago is good enough

I... use them all the time: plan with a more advanced model, build with a cheaper one. Anthropic literally packages a metamodel (opusplan) for that pattern.

Also: calling the SV blitzscaling strategy of using VC money to fund loss leader products with the goal of building a monopoly via dumping a conspiracy is quite the position given there's entire books written in the topic...

Are you only considering coding use cases?

Many enterprise use cases, such as simple data extraction, are well served by cheaper models.